Meredith Freed, Wyatt Koma Follow @KomaWyatt on
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Published: Oct 29, 2020
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TABLES
Each year, people with Medicare have the
opportunity to review their coverage options and change plans during the open
enrollment period (October 15 to December 7). Medicare beneficiaries with
traditional Medicare can compare and switch Medicare Part D stand-alone drug
plans or join a Medicare Advantage plan, while enrollees in Medicare Advantage
can compare and switch Medicare Advantage plans or elect coverage under
traditional Medicare instead. For 2021, the average Medicare beneficiaries can
choose among 33 Medicare Advantage plans and 30 Part D stand-alone prescription
drug plans (PDPs).
Medicare Advantage and Part D plans vary
significantly from each other in terms of costs and coverage. Plans often
change from one year to the next, which could lead to unexpected and avoidable
costs for beneficiaries who do not review their options annually. Plan changes
can also lead to disruptions for beneficiaries in Medicare Advantage plans, if
their doctors do not remain in their plan’s network from one year to the next,
or if their drug plan no longer covers one of their medications, or makes a change
in their pharmacy network, or increases costs for covered drugs. Further,
beneficiaries’ health care needs, including the list of drugs they take, can
change from one year to the next, making it even more important to compare
coverage options annually, as the Centers for Medicare &
Medicaid Services (CMS) recommends.
Previous KFF analysis shows
that only a small share of Medicare beneficiaries voluntarily switch plans. This
“stickiness” may indicate that beneficiaries are satisfied with their current
coverage, but it may also indicate that many people on Medicare find it
difficult to compare plans, are unaware of the open enrollment period, or are
not confident in their ability to select a better plan. This analysis builds on
previous KFF work by
examining beneficiaries’ knowledge and behavior related to the Medicare open
enrollment period, based on an analysis of the 2018 Medicare Current
Beneficiary Survey (the most recent year available). All reported results are
statistically significant.
Findings
More than Half (57%) of Medicare Beneficiaries
Do Not Review or Compare Coverage Options Annually
In 2018, 43% of all Medicare beneficiaries
reported they review or compare Medicare coverage options at least once every
year, and 57% reported that they do not review or compare options annually.
This latter group includes 24% who never compare plans, 22% of beneficiaries
who rarely compare plans, 8% who compare once every few years, and 3% who
compared only once when they first signed up for Medicare or their Prescription
Drug Plan (Figure 1; Table 1).
Figure 1: More Than
Half of Medicare Beneficiaries Report They Do Not Review or Compare their
Coverage Options Annually
The share of Medicare beneficiaries who do not
annually review their coverage options is higher among people ages 85 and
older, with lower incomes, lower education levels, and in fair or poor health
(Figure 2).
Figure 2: A Larger Share of Medicare
Beneficiaries Who Are Older, With Lower Incomes, Lower Education Levels, and in
Fair or Poor Health Do Not Compare Their Coverage Options Annually, Compared to
Beneficiaries Overall
More specifically:
·
Two-thirds of Medicare
beneficiaries age 85 and older (66%) reported they do not review coverage
options annually compared to 56% of beneficiaries age 65 to 74. As many as 33%
of people 85 and older say they never review their coverage options.
·
A larger share of
Medicare beneficiaries with incomes less than $10,000 a year said they do not
review coverage options annually than compared to people with incomes of more
than $40,000 (63% versus 56%).
·
Nearly two-thirds of
Medicare beneficiaries with less than a high school education (63%) reported
not reviewing coverage options annually compared to 53% of individuals with a
bachelor’s degree or higher. One-third (33%) of people with Medicare with less
than a high school degree say they never review their options.
·
A larger share of
beneficiaries in fair or poor health reported they do not review coverage
options annually compared to individuals in good, very good, or excellent
health (61% versus 56%).
·
In 2018, 61% of
beneficiaries in traditional Medicare said they do not review coverage options
annually; among Medicare Advantage enrollees, the share was lower (51%).
One in Three Medicare Beneficiaries Report
Difficulty Understanding the Program or Comparing Coverage Options
While most people on Medicare say it was very
easy (23%) or somewhat easy (46%) to understand the Medicare program, about one
in three people with Medicare overall (30%) said the Medicare program was
somewhat difficult (23%) or very difficult (7%) to understand, with larger
shares for specific subgroups (Figure 3; Table 2).
Figure 3: About
One-third of Medicare Beneficiaries Report Difficulty Understanding the
Medicare Program, While Some Groups Report Higher Rates
More specifically:
·
A larger share of
Medicare beneficiaries under the age of 65 with long-term disabilities reported
it was somewhat or very difficult to understand the Medicare program, compared
to those 65 to 74 (38% versus 30%)
·
Four in ten (41%)
Medicare beneficiaries in fair or poor health reported it was somewhat or very
difficult to understand the Medicare program, compared to 28% of beneficiaries
in good, very good, or excellent health.
·
Similarly, 38% of
Medicare beneficiaries with five or more chronic conditions reported it was
somewhat or very difficult to understand Medicare, compared to a quarter (26%)
of beneficiaries with one or no chronic conditions.
Half (55%) of Medicare beneficiaries reported
it was very easy (16%) or somewhat easy (39%) to review and compare their
Medicare options, while one in three overall (33%) said it was somewhat
difficult (24%) or very difficult (9%), and 12% reported they do not make
decisions about their coverage options (Table 3). A larger share of Medicare
beneficiaries who are under the age of 65 with long-term disabilities and
beneficiaries in fair or poor self-assessed health reported reviewing their
Medicare coverage options was somewhat or very difficult.
Most Medicare Beneficiaries Do Not Use
Medicare’s Official Information Sources
·
More than one-third
(38%) of people with Medicare said they (or someone for them) had ever visited
the official Medicare website for information, but a larger
share (44%) said they had never visited the website, and the remainder reported
they did not have access to the internet or had no one to access it for them
(18%) (Figure 4).
·
More than a quarter
(28%) of all Medicare beneficiaries reported they had ever called the 1-800-MEDICARE helpline
for information, but a much larger share (53%) reported they had never called,
and another 19% said they were not aware the 1-800-MEDICARE helpline existed.
·
Half (50%) of Medicare
beneficiaries reported they had read thoroughly or some parts of the Medicare & You handbook,
while almost one-third (32%) reported they had not read it at all. Nearly one
in five (19%) Medicare beneficiaries reported they did not receive it or did
not know if they had received it.
Figure 4: Most
Medicare Beneficiaries Do Not Use Medicare’s Official Information Resources
Discussion
The marketplace of Medicare private plans
operates on the premise that people with Medicare will compare plans to select
the best source of coverage, given their individual needs and
circumstances. Past KFF analysis,
based on focus groups, has revealed that many Medicare beneficiaries know about
the open enrollment period, are generally aware that they should compare plans,
but find the process of comparing plans challenging.
This analysis, based on survey data, finds that most beneficiaries do not
compare coverage options each year. In fact, nearly half never or rarely
compare their Medicare health coverage options. We also find that the very
people who may have the most at stake during the open enrollment period, such
as those in relatively poor health, are least likely to compare their plan
options, which can lead to unanticipated outcomes, such as higher out-of-pocket
costs. Moreover, a relatively small share of beneficiaries uses Medicare’s
official information resources which are designed to support informed
decision-making.
With a growing number of Medicare private plan
choices available each year, the fact that such a large share of seniors and
people with disabilities are not comparing coverage options each year warrants
attention, given the potential consequences of these decisions.
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